JSW Energy and GMR Infrastructure have entered into exclusive talks for the sale of GMR's Odisha power plant, the two companies informed the exchanges on Monday.
"We wish to inform you that JSW Energy has entered into exclusive discussions with GMR Energy Limited for potential acquisition of its subsidiary, GMR Kamalanga Energy," JSW said in its statement to BSE. The GMR subsidiary operates a 1,050 megawatt (Mw) power plant in Odisha. The two companies did not disclose the valuation for the asset."Both parties intend to conclude these discussions in an expeditious manner," the statement said.
If concluded, JSW Energy will acquire a power plant after a break of more than four years. In 2015, JSW Energy bought two hydro power assets from Jaiprakash Power Ventures for Rs 9,700 crore. In an interview with Business Standard last month, Prashant Jain, joint managing director and chief executive officer for JSW Energy said, they will look at 10 gigawatt (Gw) capacity in the next 3-5 years from the current 4.5 Gw, through a mix of organic and inorganic growth.
Conclusion of the deal will help GMR Infrastructure ease its debt pressure. According to a CARE ratings note on GMR Kamalanga Energy, the final project cost is estimated at Rs 6,519 crore. The company has three Power Purchase Agreement (PPA) with Grid Corporation of Odisha (GRIDCo), Haryana Utilities and Bihar state utility. As on March 31, GMR Energy held 87.42 per cent stake in GKEL while 10.21 per cent was held by India Infrastructure Fund (IIF), a fund managed by IDFC Project Equity Company Limited and 2.37 per cent stake by IDFC, according to CARE Ratings.
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